Plans to cut online tax threshold

The Australian Government is reportedly working on plans to slash the threshold above which consumers need to pay GST and duty on purchases from overseas to just A$30 (NZ$38), adding pressure for a similar move here.

At present most overseas purchases in Australia worth less than $1000 are GST exempt, but the government is considering cutting this by 97 per cent.

The New Zealand Retailers Association has been campaigning for two years for the abolition or reduction of the threshold in New Zealand, which stands at $400 for most goods and $240 for some items that still attract duty, such as clothing, shoes and jewellery.

President John Albertson said that if Australia did cut the threshold it would add weight to its call for a similar change here.

The thresholds have become a big bugbear for shopkeepers in both countries because of the rapid rise of internet shopping.

The New Zealand Retailers Association argues that the ability to buy goods directly from overseas free of GST and duty puts overseas online retailers at an unfair advantage over its members.

Australian state treasurers led by New South Wales' Mike Baird are reported to have agreed to take a proposal to slash the Australian threshold to $30 to federal treasurer Wayne Swan next month, once they had got approvals from their respective state governments.

Australian Retailers Association president Russell Zimmerman said it was not yet clear whether the federal government would agree to the move.

Australia's GST receipts go to the state governments, but it was up to the federal government to set the import threshold, he said.

"We are working with the government to ensure the threshold is lowered." But the Government had not given any indication that was imminent, he said.

New Zealand Customs reviewed the New Zealand threshold in 2010. It initially considered raising the threshold because of the high cost of collecting small amounts of GST and duty on low-value personal imports, but decided to leave it unchanged after lobbying from the Retailers Association.

Customs developed an online calculator [] for its website this month that helps consumers check whether they will have to pay GST and duty on purchases.

"The rise in online shopping has been phenomenal," comptroller Carolyn Tremain said.

"People importing goods need to be aware that if they have to pay import duty and GST, the goods will not be released from Customs' control until this amount is paid."